Laila Arstall, an Advocate at Carey Olsen in Guernsey looks at the tax treatment of income from image rights.

The principal form of direct taxation in Guernsey is income tax.

The receipt of fees from licensing the use of image rights to third parties is deemed to be "income from other sources". Where the recipient is resident in Guernsey for tax purposes, the income is taxable after the deduction of relevant expenditure, at the individual standard rate, currently 20 per cent, in the hands of a resident individual or at the company standard rate, currently zero per cent, in the hands of a resident company. A company is resident in Guernsey for tax purposes if it is incorporated or controlled in Guernsey and has not been granted exempt status. Exempt status is usually conferred on entities operating as part of a collective investment scheme.

To the extent a payment in relation to an image right arises or accrues from a source in Guernsey, ie, is paid by a resident of Guernsey to a non-resident individual or company, the income from the image right would not give rise to any further income tax charge in Guernsey.

This is so unless the non-resident recipient carries on business in Guernsey through a permanent establishment in Guernsey and the payment is to be taken into account in computing the profits chargeable to tax in Guernsey as income derived from that business. This means that for most structures Guernsey tax on the payment of such income to non-residents would not be payable, whether by direct charge or by way of withholding. Such income in the hands of a non-resident recipient will be deemed 'disregarded income' for Guernsey tax purposes.

Guernsey does not levy VAT or equivalent indirect tax in respect of sales. There are no taxes upon capital inheritances, capital gains, gifts, sales or turnover (unless the varying of investments and the turning of such investments to account is a business or part of a business), nor are there any estate duties (save for registration fees and ad valorem duty for a Guernsey Grant of Representation where the deceased dies leaving assets in Guernsey which require presentation of such a Grant). Stamp duty is not chargeable in Guernsey on the issue, transfer or redemption of shares in a company.

Guernsey can offer a number of investment holding and operating structures ranging from:

  • Companies
  • Trusts
  • Foundations
  • Protected Cell Companies
  • Incorporated Cell Companies
  • Partnerships
  • Limited Partnerships
  • Collective Investment Schemes

In this way, Guernsey's legal framework and tax neutrality facilitate the holding and management of image rights through a range of vehicles to meet the requirements of wealth management and succession planning.

Originally published by IFC Review, August 2013.

For more information about Guernsey's finance industry please visit

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.